What an amazing financial innovation.
If the government involves itself now it'll actually be much cheaper then if the government involves themselves after they've entangled the entire stock market and financial sector into their bet.
Maybe we can call it the pre-bailout.
They also propose that their services will be so key to some sectors (like pharma) that they'll also seek revenue sharing as part of the companies getting the privilege to use the most cutting edge intelligence. Insane stuff honestly.
All I'm going to say is I'm actually really hoping that China stays competitive in this field. Just like they are delivering EVs for $25k to the world it'd be great for all consumers and companies if they can also deliver 90% of the AI performance for 1/10 of the cost.
> Anyways, OpenAI is not in profit-seeking mode, and there's no economic incentives to do so right now.
You disparaged the article, but then immediately agreed with its main point. The fact that there is no economic incentive for OpenAI to run sustainably is a problem. It means they will happily continue to spend trillions of investor, lender, and (soon) government money, most of which is being burned as waste heat radiating from GPUs, in pursuit of an AGI pipedream.
Not being in profit seeking mode is one thing. Being so far away from profit seeking mode that you need a government bailout is an entirely different thing.
If you show revenue, people will ask "How much?" And it will never be enough, but if you have no revenue, you can say you're pre-revenue. You're a potential pure play. It's not about how much you earn, it's about what you're worth. And who's worth the most? Companies that lose money.
Huh? They have committed to about a trillion dollars in infrastructure build out they will need to pay for. How about instead of begging tax payers to back loans to pay for this, they actually produce some profit and pay for it themselves?
sama showed a really bad side of himself in that answer to Brad Gerstner. You can tell Gerstner thought Altman was kidding at first, but when it became apparent he was lashing out, the answer became less about the answer and more about why Sam Altman was so injured by the (very fair) question. Which, if you haven't read TFA or seen it, the question was "How are you going to make money given how much you borrowed" but Sam's answer was essentially "How dare you ask me that question, we're happy to take back your shares if you have a problem with the way things are going". That was my read on it anyway.
Corporate leadership in America has a megalomania problem. Billionaires in general have a megalomania problem. OpenAI specifically, apparently, has a megalomania problem.
Why should we bail out OAI again? It’s hardly sota anymore. Replacing it with a (more) competitive model made by a trillion dollar company with tons of cash is as easy as replacing an API key
The idea is that they're too big to fail, or at least trying to become so - that if they go down, they'll take Nvidia, AMD, Microsoft, and Oracle down with them. (Maybe not literally, but at least in terms of share price, which of course is the only thing that really matters.)
Obviously this is not a good reason to bail out a company, but I wouldn't be surprised...
How much more has openAI actually spend on capex vs competitors? I don't find openAI noticably better in any of my use cases but it does feel significantly snappier than others.
American tech giants like OpenAI and Nvidia borrow and spend far beyond what they can realistically earn back for decades. Now, short on cash, they’re framing AI as a national security race — warning that without government backing, China will win.
The real play is to socialize their risk while keeping profits private. When markets call this “innovation,” it’s worth remembering: that’s not capitalism working — that’s capture.
Also important to remember that Google is years ahead of most other AI shops in that they're running on custom silicon. This makes their inference (and maybe training) cheaper then almost any other company. People don't realize this when compared to OpenAI/Anthropic where most folks are utilizing NVIDIA GPUs, Google is completely different in that aspect with their custom TPU platform.
Depends what you mean by deep in the hole. Given how liberal Gemini is with free access it hardly seems like moneymaking is the end goal. Amongst AI labs, I've personally found Deepmind to be consistently the least sensationalist and least concerned with marketing. I think they're doing a great job of commoditising their complement.
It cannot be stressed or even succinctly elaborated how far ahead Google is compared to every other organization doing anything remotely like this, anywhere on the planet. Practically speaking there is no "catching up" to Google; you can only hope to capitalize on any mistakes that they make.
Google has a massive ad revenue that’s funding its AI habit. The difference between Google and OpenAI is that of a rich guy buying an expensive car that he can easily afford and a working class guy having a mid life crisis.
Wait, if I reading the original article (https://news.ycombinator.com/item?id=45830380) correctly, this is not a bailout? It's more that the US government acts as a guarantor for loans from other parties, and only steps in if the debt is defaulted on.
Also this is not a loan for what has already been done so far, this is what will be built out in the future, so the US is getting something in return: huge amounts of infrastructure, most of which would be datacenters, chips, and power. (In an alternate timeline this would be clean power, or at least be built out in Australia, cf https://news.ycombinator.com/item?id=45836104 -- but sadly this is not that timeline.)
Worst case, when the bubble pops, we get a glut of power and compute which (ideally) should reduce overall electricity and the obscenely bloated cloud bills. However, at the rates that demand is growing, this seems unlikely.
So to rephrase: The real problem is that the infra needed to support the forecasted growth is very expensive, and requires trillions in funding, which gets very expensive to borrow. And so the US government is being asked to provide loan guarantees, because who better to appreciate what interest payments on trillions of debt look like?
If banks were too big to fail back in '08, it makes total sense that the current AI bubble is also too big to fail, given that it is many multiples of the financial crisis.
Not to mention that it is propping up the stock market. Ain't no way the current admin will allow the biggest financial crisis to unfold on their watch.
Let them fail, and take the overhyped tech economy with them I say. After the utter disaster that were the 9/11 Airline bailouts, the 2008 Bank bailouts, and the COVID bailouts, I am sick and fucking tired of tax dollars supporting rich sociopaths who can’t make rational financial decisions beyond the scope of their personal wealth.
I just hope it's very soon. The longer they go on propping up the house of cards, the more it seeps into the broader economy making the inevitable crash deeper and longer.
[+] [-] ungovernableCat|4 months ago|reply
They also propose that their services will be so key to some sectors (like pharma) that they'll also seek revenue sharing as part of the companies getting the privilege to use the most cutting edge intelligence. Insane stuff honestly.
All I'm going to say is I'm actually really hoping that China stays competitive in this field. Just like they are delivering EVs for $25k to the world it'd be great for all consumers and companies if they can also deliver 90% of the AI performance for 1/10 of the cost.
[+] [-] zerolayers|4 months ago|reply
[+] [-] Awesomedonut|4 months ago|reply
Oof
[+] [-] onemoresoop|4 months ago|reply
[+] [-] phillipcarter|4 months ago|reply
Anyways, OpenAI is not in profit-seeking mode, and there's no economic incentives to do so right now.
[+] [-] wavemode|4 months ago|reply
You disparaged the article, but then immediately agreed with its main point. The fact that there is no economic incentive for OpenAI to run sustainably is a problem. It means they will happily continue to spend trillions of investor, lender, and (soon) government money, most of which is being burned as waste heat radiating from GPUs, in pursuit of an AGI pipedream.
[+] [-] stanleykm|4 months ago|reply
[+] [-] d0odk|4 months ago|reply
[+] [-] sethops1|4 months ago|reply
[+] [-] unknown|4 months ago|reply
[deleted]
[+] [-] woeirua|4 months ago|reply
[+] [-] johnnienaked|4 months ago|reply
[+] [-] bix6|4 months ago|reply
Yeah there certainly aren’t when you can sucker everyone else into paying for your money losing company and cash out in the secondary market.
[+] [-] FromOmelas|4 months ago|reply
[+] [-] wavemode|4 months ago|reply
If you owe the bank $1T, the government has a problem (you're too big to fail and will get bailed out).
[+] [-] _lex|4 months ago|reply
They can blend leverage, 100% 1st year depreciation with using the hardware itself as a financing asset and dozens more financial engineering steps -
Their actual cost of financing is probably incredibly low already.
I worry that they are thinking of trying to run the company just ahead of debt/lease payments or something, otherwise this is just a distraction
So they want even more?
[+] [-] lokar|4 months ago|reply
[+] [-] _vaporwave_|4 months ago|reply
[+] [-] ModernMech|4 months ago|reply
Corporate leadership in America has a megalomania problem. Billionaires in general have a megalomania problem. OpenAI specifically, apparently, has a megalomania problem.
[+] [-] ChrisArchitect|4 months ago|reply
OpenAI asks U.S. for loan guarantees to fund $1T AI expansion
https://news.ycombinator.com/item?id=45830380
[+] [-] spaceman_2020|4 months ago|reply
[+] [-] daemonologist|4 months ago|reply
Obviously this is not a good reason to bail out a company, but I wouldn't be surprised...
[+] [-] Meneth|4 months ago|reply
[+] [-] tim333|4 months ago|reply
[+] [-] csours|4 months ago|reply
Which indicates to me that the value add will come from somewhere else, which would seem to be whales and addicts.
[+] [-] maxglute|4 months ago|reply
[+] [-] esafak|4 months ago|reply
[+] [-] lupire|4 months ago|reply
[+] [-] arresin|4 months ago|reply
[+] [-] svenmalvik|4 months ago|reply
The real play is to socialize their risk while keeping profits private. When markets call this “innovation,” it’s worth remembering: that’s not capitalism working — that’s capture.
[+] [-] curt15|4 months ago|reply
[+] [-] studmuffin650|4 months ago|reply
[+] [-] stuartjohnson12|4 months ago|reply
https://gwern.net/complement
[+] [-] HWR_14|4 months ago|reply
[+] [-] ekelsen|4 months ago|reply
[+] [-] 827a|4 months ago|reply
[+] [-] darth_avocado|4 months ago|reply
[+] [-] keeda|4 months ago|reply
Also this is not a loan for what has already been done so far, this is what will be built out in the future, so the US is getting something in return: huge amounts of infrastructure, most of which would be datacenters, chips, and power. (In an alternate timeline this would be clean power, or at least be built out in Australia, cf https://news.ycombinator.com/item?id=45836104 -- but sadly this is not that timeline.)
Worst case, when the bubble pops, we get a glut of power and compute which (ideally) should reduce overall electricity and the obscenely bloated cloud bills. However, at the rates that demand is growing, this seems unlikely.
So to rephrase: The real problem is that the infra needed to support the forecasted growth is very expensive, and requires trillions in funding, which gets very expensive to borrow. And so the US government is being asked to provide loan guarantees, because who better to appreciate what interest payments on trillions of debt look like?
[+] [-] TrackerFF|4 months ago|reply
Not to mention that it is propping up the stock market. Ain't no way the current admin will allow the biggest financial crisis to unfold on their watch.
[+] [-] stego-tech|4 months ago|reply
Let. It. Burn.
[+] [-] mrandish|4 months ago|reply
[+] [-] mrguyorama|4 months ago|reply
What did you expect?
[+] [-] mvdtnz|4 months ago|reply
[+] [-] xyzal|4 months ago|reply